By default, the photos and video clips you import into 'Photos' app are stored in the 'Photos library' on your Mac computer. If you import photos from a storage device or an another folder on your Mac, you can have Photos leave the photos in their original locations. So that they will not take up an extra space on your Mac computer. When you access your photos in Photos app, then you can view aand work with these photos in Photos window. The photos which are stored outside your Photos library in another location are known as referenced files. It is a best way to save space on your Mac. If you use iCloud Photo Library, the photos and videos outside your 'Photos' library are not stored in your iCloud Photo Library. So you can not access these files on any other device or Mac which uses iCloud Photo Library. If you disconnect the device where the files are located or rename the files in the Finder or move to another location, then Photos app will not be able to locate them. You can not work with those photos in the Photos app.
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